- Dr Pepper Snapple has announced a distribution partnership with RTD cold brew coffee maker High Brew Coffee, which recently received $4 million in funding from CAVU Venture Partners.
- The High Brew partnership offers Dr Pepper Snapple a way into a fast-growing beverage category that can help the beverage giant further diversify beyond soda and fruit-flavored drinks.
- Dr Pepper Snapple's first-quarter profits jumped 16% to $182 million, or $0.96 per share, thanks to increased demand and slightly higher prices. Revenue also saw a 2% uptick to $1.49 billion. Both revenue and profits blew past analysts' expectations.
Dr Pepper Snapple's bottler case sales (BCS) volume increased 2% for both carbonated and non-carbonated beverages, which were improvements over the previous quarter. The company also increased volumes in the U.S. and Canada by 2% after being flat in the previous quarter.
Dr Pepper Snapple beat out competitors Coca-Cola and PepsiCo's North America Beverages segment in volume sales for carbonated beverages, as those companies' results were flat and a 2% decline, respectively. But DPS still lags behind its competitors in the non-carbonated beverage segment, as Coca-Cola and PepsiCo's NAB segment both reported a 7% volume increase last quarter.
To improve its positioning in the non-carbonated beverage segment, distribution deals and minority stake acquisitions have been a key strategy for Dr Pepper Snapple. Most recently, that has included the company's partnership with High Brew, which is critical for DPS to capitalize on a fast-growing segment in non-carbonated beverages its competitors have not yet entered.
Last April, DPS upgraded its 18-month national distribution deal with coffeefruit-infused antioxidant drink maker Bai Brands to a $15 million minority stake. Then in August, the company snapped up an 11.7% stake in sports drink startup BodyArmor, valued at $20 million. These deals (all part of DPS's allied brands portfolio) show Dr Pepper Snapple's initiative to expand its non-carbonated beverage sector, but the company still has a long way to go to catch up to its competitors' booming growth in that segment.